Southern Jewelry News: Merchants say Capital One/Discover deal shows need for Credit Card Competition Act
“This shows Capital One realizes the Credit Card Competition Act is going to pass and wants to be prepared to compete for merchants’ business once that becomes possible,” MPC Executive Committee member and National Association of Convenience Stores General Counsel Doug Kantor said. “Visa and Mastercard lock banks that issue credit cards into a centrally set scheme of fees and prohibit them from allowing competitors on their cards. No merger can change that bar to competition – only legislation can. If the CCCA is passed, Main Street businesses and their customers get competition regardless of whether the merger goes through. But the merger alone doesn’t get us to that goal.”
READ MORE +
Marketplace Radio: The fees war between retailers and credit card companies is heating up
Merchants argue these percentages are averages of hundreds of different kinds of rates for different cards, merchants and situations, and conceal increasing numbers of high-end credit cards that charge merchants higher rates. “A lot of times what Visa and Mastercard will do,” said Doug Kantor, general counsel for the National Association of Convenience Stores (and MPC Executive Committee member), “is they’ll create new rates, leave the old ones in place, and say, ‘Well, we didn’t increase all these rates in here,’ and they sort of average out all their rates, even though they know the banks are issuing more cards at the higher rate.”
READ MORE +
NerdWallet: Could the Credit Card Competition Act Impact Credit Unions?
With assets of over $100 billion, there’s only one major credit union that would be directly impacted by the Credit Card Competition Act. Navy Federal Credit Union has 13 million members — many with ties to the military, including their qualifying relatives — and branches near military installations and overseas. The credit union declined to comment on the potential impact the bill would have on its community. “It only impacts a single credit union,” says Doug Kantor, a member of the Merchants Payments Coalition executive committee and general counsel at the National Association of Convenience Stores. “All the rest are exempt from the bill.”
READ MORE +
Digital Transactions: Will Cap One’s Deal for Discover Create ‘True’ Network Competition? Depends on Whom You Ask
Without passage of the CCCA, Capital One’s ownership of Discover’s credit card network and the Pulse debit network does not create true network choice because Visa Inc. and Mastercard Inc. require financial institutions issuing cards on their networks to route transactions over those networks, says Doug Kantor, MPC’s Executive Committee member and National Association of Convenience Stores General Counsel. That rule would apply to Visa and Mastercard branded cards issued by Capital One.
READ MORE +
American Prospect: Capital One–Discover Merger Tests Bank Regulators’ Merger Approach
“Visa and Mastercard lock banks that issue credit cards into a centrally set scheme of fees and prohibit them from allowing competitors on their cards,” said Doug Kantor of the Merchants Payments Coalition, a group of smaller retailers, in a statement. “No merger can change that bar to competition—only legislation can.”
READ MORE +
NACS Daily: Merchants Say Capital One/Discover Deal Won’t Bring Competition
“This shows Capital One realizes the Credit Card Competition Act is going to pass and wants to be prepared to compete for merchants’ business once that becomes possible,” MPC Executive Committee member and NACS General Counsel Doug Kantor said. “Visa and Mastercard lock banks that issue credit cards into a centrally set scheme of fees and prohibit them from allowing competitors on their cards. No merger can change that bar to competition—only legislation can. If the CCCA is passed, Main Street businesses and their customers get competition regardless of whether the merger goes through. But the merger alone doesn’t get us to that goal.”
READ MORE +
American Banker: Will the Capital One-Discover deal stall Durbin's interchange bill?
Doug Kantor, general counsel at the National Association of Convenience Stores and member of the executive committee of the Merchants Payments Coalition, said that the deal shouldn't impact the bill's chances on Capitol Hill. "It probably doesn't mean anything for legislation, because there's no competition among networks on the merchants' side right now, and this won't change it," he said. "It doesn't really change the landscape in terms of the fact that these major networks, Visa-Mastercard, control the networks and tell the banks how much to charge. So the legislation is every bit as needed as before."
READ MORE +
Reuters: Capital One's $35 billion Discover deal hinges on playing consumer champion
Lawmakers such as Senate Majority Whip Dick Durbin, a Democrat who represents Illinois where Discover is based, have criticized , opens new tab Visa and Mastercard for a hold on the market. "The credit card market is so devoid of competition ... that almost any change is probably an improvement," said Doug Kantor, (MPC Executive Committee member and) general counsel of the National Association of Convenience Stores.
READ MORE +
USA Today: Discover's merger with Capital One may mean luxe lounges, better service, plus more perks
Capital One’s foray into payments processing probably won’t help merchants or customers save on credit card fees, said Doug Kantor, (MPC Executive Committee member and) general counsel at the National Association of Convenience Stores trade group, which supports the bipartisan bill to increase competition in the payments processing industry. “Discover has a very tiny percentage of the network, and that’ll be true after the acquisition,” Kantor said. "It’s a chink in the armor.” If Capital One shifts all its credit cards to the Discover network, Kantor said that could be “significant.” But that's not happening. Capital One said in its release that debit card purchases will be processed on the Discover network but only "selected" credit card transactions. “There’s a reason for that,” Kantor said. “The gravy train is too good.” Visa and Mastercard reaped $93 billion in transaction fees in 2022 from merchants, and Capital One’s likely positioning itself to grab some of that, Kantor said. If the bipartisan bill passes, Capital One could serve as the second processing option the bill would require.
READ MORE +
MarketWatch: Capital One-Discover deal could lead to higher APRs, but better rewards, experts say
Doug Kantor, an executive committee member at the Merchant Payment Coalition, thinks the Capital One-Discover deal would have a minimal impact on the current swipe fee landscape. Instead, he sees the acquisition as a way for Capital One to prepare for new credit-card regulation taking shape in Congress that targets those interchange charges. “It seems more geared toward Capital One getting ready for the Credit Card Competition Act,” he said, referring to the legislation proposed by Sen. Dick Durbin, a Democrat from Illinois, last summer.
READ MORE +